According to a legend told in Andrew Evans's Iceland, a red cloth with a white cross fell from heaven to point out the Danish victory at the Battle of Valdemar in the 13th century. Denmark later used the cross of the flag of Scandinavia as a sign of a divine right. Iceland, on the other hand, continued to use the Christian symbol after independence.

The civilian flag of Iceland has been used as an unofficial symbol since 1913. The flag was officially adopted on June 19, 1915, to represent Iceland, and has been used in international seas since 1 December 1918, when Iceland became a separate kingdom in the family of Scandinavian countries. Other symbolic signs and colors in the flag indicate the natural characteristics of Iceland.

From 1350 onwards, Iceland began to use the coat of arms of a stockfish crowned on the red ground. It was combined with the coat of arms of the Danish kings and was thus part of the Danish Royal standard until this century. At the same time, the Greek royal family was closely related to Denmark, and the rigging was also part of the Greek Royal Flag.

In 1897, an unofficial flag was made with a white cross on a blue field, and this flag became popular until at least the current flag appeared in 1915. Although it was the flag of the Scandinavian cross, it was very similar to the Greek flag, and therefore did not receive official approval.